I m working with a reputed multinational company as an executive. From some days company has started to terminate the employee under manpower reduction. Company is giving some benifits like 30 months basic to the terminated employee and giving one month notice for searching job. Company targeting high salaried and most experienced peoples. Can organisation do so. If so can we appeal against this. So many employees are facing . Pls help
From India, Pune
1From India, Pune
What you mentioned is legally termed as retrenchment which is defined under the Industrial Disputes Act, 1947.
As per the definition of worker in the act employee performing managerial & supervisor who does mainly managerial work are not employees. Hence if such employees are retrenched by company, there is no remedy.
From India, Mumbai
As per the definition of worker in the act employee performing managerial & supervisor who does mainly managerial work are not employees. Hence if such employees are retrenched by company, there is no remedy.
From India, Mumbai
This appears to be a targetted manpower reduction of high cost employees and the package seems to be somewhat lucrative. But loss of employment and suddenly being back in the job market struggling to find a job opening may be a bit taxing particularly looking to the stagnating economy. In these circumstances where there is not much scope in the existing employment you may have to bid for time and await good times ahead which hopefully is not far away.
From India, Mumbai
From India, Mumbai
Dear Amit,
This is in continuation of the foregoing comments of our friends. In India, the concept of employment at will has not yet been legally recognized. Therefore, the exit policy of any industrial organization for its employees, whether it be an MNC or a domestic enterprise should not run counter to the provisions of applicable labor laws or the Indian Contract Act,1872 as the case be in terms of unilateral implementation by the employer. Unfortunately, after the advent of LPG, most of the MNCs in India adopt the policy of hire and fire solely based on their market performance. Particularly such a practice is more rampant in the IT and ITES Sector where the work force comprises mostly of knowledge workers who have a high degree of employability in the employment market in terms of age and expertise. Therefore, even large scale reduction in the manpower of such industries simply go unnoticed and even uncomplained of by the affected employees themselves. Why do MNCs thrust such seemingly voluntary resignation on the part of its specific type or selected group of employees alone on the pretext of manpower reduction instead of coming out with a transparent VR Scheme always remains an unasked question. It is only because of the restrictions imposed by the Income Tax Act u/s 10(10C) by means of the guide lines set down in rule 2-BA. In respect of employees to whom labor law like the ID Act,1947 is not applicable, the managements would cite the exit clause of the contract of employment which would normally contain a notice period of maximum three months or equivalent amount of salary in lieu thereof on either side and threaten them to put down their papers. But such an exit clause if adopted by the employer without a reasonable cause would be " opposed to public policy " under the Indian Contract Act,1872 and liable to be struck down as per the judgment of the Supreme Court in Central Inland Water Transport Corporation Ltd vs. Brojo Nath Ganguly & Another [ 1986 (2) LLJ 171 SC ]. Therefore, in this precarious situation of forced exit, you can legally resist it provided you have the wherewithal, courage and patience.
From India, Salem
This is in continuation of the foregoing comments of our friends. In India, the concept of employment at will has not yet been legally recognized. Therefore, the exit policy of any industrial organization for its employees, whether it be an MNC or a domestic enterprise should not run counter to the provisions of applicable labor laws or the Indian Contract Act,1872 as the case be in terms of unilateral implementation by the employer. Unfortunately, after the advent of LPG, most of the MNCs in India adopt the policy of hire and fire solely based on their market performance. Particularly such a practice is more rampant in the IT and ITES Sector where the work force comprises mostly of knowledge workers who have a high degree of employability in the employment market in terms of age and expertise. Therefore, even large scale reduction in the manpower of such industries simply go unnoticed and even uncomplained of by the affected employees themselves. Why do MNCs thrust such seemingly voluntary resignation on the part of its specific type or selected group of employees alone on the pretext of manpower reduction instead of coming out with a transparent VR Scheme always remains an unasked question. It is only because of the restrictions imposed by the Income Tax Act u/s 10(10C) by means of the guide lines set down in rule 2-BA. In respect of employees to whom labor law like the ID Act,1947 is not applicable, the managements would cite the exit clause of the contract of employment which would normally contain a notice period of maximum three months or equivalent amount of salary in lieu thereof on either side and threaten them to put down their papers. But such an exit clause if adopted by the employer without a reasonable cause would be " opposed to public policy " under the Indian Contract Act,1872 and liable to be struck down as per the judgment of the Supreme Court in Central Inland Water Transport Corporation Ltd vs. Brojo Nath Ganguly & Another [ 1986 (2) LLJ 171 SC ]. Therefore, in this precarious situation of forced exit, you can legally resist it provided you have the wherewithal, courage and patience.
From India, Salem
Thanks..Umakanthan Sir. If u suggest me the legal way to fight against this management act It will precious n valuable for me
From India, Pune
From India, Pune
Dear Amit,
As you want to know, whether organisation terminate employee under manpower reduction. Yes, our laws and rules permits to do so. But this is to be done after obtaining permission from the appropriate govt. It is very unfortunate that our present laws and rules are yet to come out with a definite defination of employee categorisation. Mr. Umakant has provided substantial information & his views over the matter.
The Retrenchment can not be denied if there is a requirement where the preconditions are existing for reducing cost & expenses. If your company is facing a financial hardship, it may decide to revisit business operations and do away with branch operations that are losing money. It may also reduce the budget for office supplies, look at the current staffing needs and whether the operation will suffer from a staff reduction. The company may delay launching a new product line or discontinue services no longer considered essential to the success of the company. Layoffing of employment can not be ruled out if there is real hardship remain before the company in spite no fault of the employee.
From India, Mumbai
As you want to know, whether organisation terminate employee under manpower reduction. Yes, our laws and rules permits to do so. But this is to be done after obtaining permission from the appropriate govt. It is very unfortunate that our present laws and rules are yet to come out with a definite defination of employee categorisation. Mr. Umakant has provided substantial information & his views over the matter.
The Retrenchment can not be denied if there is a requirement where the preconditions are existing for reducing cost & expenses. If your company is facing a financial hardship, it may decide to revisit business operations and do away with branch operations that are losing money. It may also reduce the budget for office supplies, look at the current staffing needs and whether the operation will suffer from a staff reduction. The company may delay launching a new product line or discontinue services no longer considered essential to the success of the company. Layoffing of employment can not be ruled out if there is real hardship remain before the company in spite no fault of the employee.
From India, Mumbai
Dear Amit,
If you are not falling under the category of "workman" as defined u/s 2 (s) of the I.D Act,1947, the only option available to you is filing a Civil Suit against the termination orders. To do that first you should be very firm in not submitting your resignation as instructed by the management despite all the pressure and coercive tactics likely to be applied by them. Then only they will terminate you as per the exit clause of the contract. There is no provision for getting any injunction or setting aside the orders of transfer. At best the Civil Court can declare the orders as illegal on the ground of it being opposed to public policy and award compensation only and not directing reinstatement. But it will take time and you will have to patiently wait.
I have no idea about your age, financial position and employability.
Therefore, think thoroughly before taking a decision. Of course life does not end up with a job alone.
From India, Salem
If you are not falling under the category of "workman" as defined u/s 2 (s) of the I.D Act,1947, the only option available to you is filing a Civil Suit against the termination orders. To do that first you should be very firm in not submitting your resignation as instructed by the management despite all the pressure and coercive tactics likely to be applied by them. Then only they will terminate you as per the exit clause of the contract. There is no provision for getting any injunction or setting aside the orders of transfer. At best the Civil Court can declare the orders as illegal on the ground of it being opposed to public policy and award compensation only and not directing reinstatement. But it will take time and you will have to patiently wait.
I have no idea about your age, financial position and employability.
Therefore, think thoroughly before taking a decision. Of course life does not end up with a job alone.
From India, Salem
I will also appreciate the of Mr. Umakanthan as Civil Suit remedy will go longer and in between period you may not accept any employment in another company. if you have the backup, patient and really injustice with you and further you have strong evidence to prove you also definitely file a suit.
Malik Ravindra
From India ,
Malik Ravindra
From India ,
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
Employee Appraisal Form new.doc